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Apr 01, 2023
Tyson Foods Q2 2023 Earnings Report
Reported flat sales but experienced challenges in the protein market, with strong performance in branded foods.
Key Takeaways
Tyson Foods reported flat sales compared to the prior year, but faced challenges in the protein market. The company saw strong performance in its branded foods business and is focused on its growth strategy and meeting customer needs. Adjusted operating income and EPS decreased significantly year-over-year.
Sales of $13.133 billion were flat compared to the prior year.
GAAP operating loss was $49 million, a decrease of 104% year-over-year; Adjusted operating income was $65 million, a decrease of 94% year-over-year.
GAAP EPS was ($0.28), down 112% from prior year; Adjusted EPS was ($0.04), down 102% from prior year.
The company had liquidity of $2.2 billion at April 1, 2023, and entered into $1.75 billion of new term loan facilities on May 3, 2023.
Revenue by Segment
Forward Guidance
For fiscal year 2023, USDA projects a slight increase in domestic protein production. Tyson anticipates sales of $53 billion to $54 billion and capital expenditures of approximately $2.3 billion. Net interest expense is expected to be around $340 million, and the adjusted effective tax rate is projected to be around 22%.
Positive Outlook
- We anticipate an adjusted operating margin of 8% to 10% in fiscal 2023 driven by volume growth, productivity and disciplined revenue management (Prepared Foods).
- We anticipate improved results from our foreign operations in fiscal 2023 (International/Other).
- We expect sales to be $53 billion to $54 billion in fiscal 2023.
- We expect capital expenditures of approximately $2.3 billion for fiscal 2023. Capital expenditures include spending for capacity expansion and utilization, automation to alleviate labor challenges and brand and product innovation.
- We expect total liquidity, which was approximately $2.2 billion at April 1, 2023, to remain above our minimum liquidity target of $1.0 billion.
Challenges Ahead
- USDA projects domestic production will decrease approximately 4% in fiscal 2023 as compared to fiscal 2022 (Beef).
Historical Earnings Impact
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Avg. Return Before/After Earnings
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